Tesla CEO Elon Musk said on Tuesday that the US government should avoid trying to regulate the crypto market.
Musk said at a code conference in Beverly Hills, California: “I think it is impossible to destroy cryptocurrencies, but the government may slow down its development.”
Musk answered questions from New York Times columnist Karlswisher on stage. She asked whether the U.S. government should participate in regulating the crypto space.
“I would say,’Do nothing,'” he said.
Tesla said earlier this year that it had purchased $1.5 billion worth of Bitcoin. As the price of Bitcoin soared, the value of these assets soared to approximately $2.5 billion in the second quarter. Since then, Bitcoin and other cryptocurrencies have fallen together.
Musk often touts his support for various digital coins on Twitter, and he is optimistic about the potential role of encryption in reducing “errors and delays” in traditional currency systems. But he admitted that cryptocurrency cannot solve all the problems of social ills.
“I would not say that I am a huge cryptocurrency expert,” Musk said. “I think cryptocurrency has some value, but I won’t say this is the second coming of the Messiah.”
Musk talks about China’s crackdown on cryptocurrencies
Musk also talked about China’s role in cryptocurrency mining and regulation.
Last week, the People’s Bank of China clarified tougher measures in its broader crypto crackdown, including strengthening the system to monitor crypto-related transactions.
Musk said that this may be related to the country’s “major power generation problem.”
“Part of the reason may actually be due to power shortages in many parts of China,” Musk said. “Now many places in southern China are experiencing random power outages because power demand is higher than expected.”
“Crypto mining may have played a role in this,” he said.
At a higher level, the decentralized nature of cryptocurrency may pose challenges to the Chinese government.
“I think the fundamental purpose of cryptocurrency is to weaken the power of the central government,” Musk said. “They don’t like that.”